According to the Administration's "National Security Strategy" document released on March 16, 2006, the United States "may face no greater challenge from a single country than Iran." That perception, generated primarily by Iran's developing nuclear program, has been intensified by Iran's assistance to Shiite armed groups in Iraq and to Lebanese Hezbollah. The Bush Administration is pursuing several avenues to attempt to contain the potential threat posed by Iran, but the Administration's focus on preventing an Iranian nuclear weapons breakthrough -- as well as on stabilizing Iraq -- has brought multilateral diplomatic strategy to the forefront. Since August 2006, Iran has not complied with repeated U.N. Security Council deadlines to cease uranium enrichment, resulting in two U.N. resolutions (1737 and 1747) to date that ban trade with and freeze the assets of Iran's nuclear and related entities and personalities, prevent Iran from transferring arms outside Iran, and require reporting on international travel by named Iranians.

Other Iranian policies, particularly its material support to groups that use violence to prevent Israeli-Arab peace or undermine pro-U.S. governments, are attracting growing U.S. concern. These groups include Lebanese Hezbollah and the Palestinian groups Hamas and Palestinian Islamic Jihad. Some U.S. officials also believe that Iran is purposefully harboring several senior Al Qaeda activists, although Iran claims they are "in custody." U.S. officials accuse Iran of attempting to exert influence in Iraq and causing the deaths of U.S. troops by providing arms and other material assistance to Shiite Islamist militias participating in escalating sectarian violence against Iraq's Sunnis. In part to direct regional attention to that view but also to engage Iran on an Iraq solution, the Administration supported and attended an Iraqi regional conference on March 10, 2007, attended by Iran (and Syria).

To strengthen its diplomacy, the Administration has added components to efforts to contain Iran, including a naval buildup in the Persian Gulf; arrests of Iranian agents in Iraq; efforts to persuade European governments to curb trade, investment, and credits to Iran; and pressure on foreign banks not to do business with Iran. Some legislation introduced in the 110th Congress, including H.R. 1400, S. 970, H.R. 957, and H.R. 1357, would tighten some U.S. sanctions on Iran. Amid signs that the pressure is causing increased strains among leaders in Iran, the Administration strongly denies it is planning on military action against Iran. Some in the Administration believe that only a change of Iran's regime would end the threat posed by Iran, although without a clear means of achieving such a result.